ACCC alleges Kmart misled consumers

The Australian Competition and Consumer Commission has instituted civil proceedings in the Federal Court, Adelaide against Kmart Australia Ltd for allegedly misleading consumers through its in-store advertising.

The ACCC alleged that in 1997 and 1998 the Kmart store at Firle in suburban Adelaide had falsely represented the savings to be made on the purchase of a Black & Decker 2 cup expresso machine. The representations were made on labels attached to the shelf on which the product was displayed. There was a series of reductions in the price of the product over many months. In each instance the shelf label represented savings to consumers based on a comparison of the current selling price and the price at which the product was sold when its price was initially reduced, not the immediate past selling price.

The ACCC is seeking findings of fact and orders that Kmart will:

• refrain from displaying such misleading representations in its retail outlets;
• apologise to its customers through newspaper notices for falsely representing savings on the product;
• compensate any consumer who had been misled; and
• review its trade practices compliance program for its management and staff.

The matter is set down for a directions hearing on Tuesday, 11 August at 9.30 a.m.